Skip to comments.Security Deposits Are the Bane of Many Renters. Lawmakers Want to Change That.
Posted on 01/18/2020 4:03:24 PM PST by karpov
A growing number of legislators are trying to eliminate a practice that has prevented many lower- and middle-income people from renting an apartment: the steep, all-cash security deposit.
With low-cost housing hard to come by in many states, state and city lawmakers are introducing bills that would give younger renters and others strapped for cash the choice to replace security deposits with insurance policies or installment plans paid overtime. These payments are usually equivalent to one or two months rent, which landlords require as a guarantee against damages.
Cincinnati on Wednesday became the first U.S. city to require that landlords accept alternatives to a cash deposit, including payment plans and insurance.
New York state lawmakers recently passed a measure limiting deposits to no more than one months rent. A member of the Virginia House of Delegates submitted a bill to give tenants options for how they pay deposits last week. Legislators in Connecticut, Alabama and New Hampshire say they plan to introduce similar bills.
Laws to ease costs associated with security deposits are part of a growing effort by lawmakers in a number of states to address the shortage of affordable housing and rapidly rising rents. Over the past year, California, New York and Oregon have introduced new limits on rent, while others have enhanced protections against evictions.
Average rents rose 36% nationally over the past decade, though rents rose more than twice that amount in hot markets such as Denver and Seattle, according to data provider Yardi Matrix. About a quarter of American renters pay 50% or more of their income in rent, according to listings platform Apartment List.
Many landlords are already pushing back against the security-deposit legislation. They say collecting all-cash security deposits at move-in is necessary to protect their assets
(Excerpt) Read more at wsj.com ...
of course they want to eliminate it. just one more brick removed from the wall.
Many tenants view security deposit as last months rent and therefore consider themselves zero-liable for damage to the property
“all-cash security deposit”
That isn’t right. How much of that gets declared to the IRS? Too easy to say it never got paid when you move out. (and I ain’t no friend to the IRS)
Lower deposits mean higher rents because of increased risks.
Most tenants are good tenants. But there are enough bad ones, the kind who trash the place, move out without paying their rent, quit paying rent and stay long enough to get evicted etc., that this is why landlords ask for security deposits in the first place.
“the steep, all-cash security deposit.”
I take it lawmakers aren’t in real estate. So let’s make lawmakers rent their basements out to those without enough cash for one months rent.
This! Liberals are so damn stupid. I have a bunch of rental properties. They are pretty nice properties in a good location. I may take a chance on someone with less than stellar credit if I get a meaningful security deposit. If I can't get a meaningful security deposit, they will have to go elsewhere.
The government should force property owners to provide room and board to the less fortunate, everybody wins!
Any CPA accounting types know more than me, but, a security deposit is not considered income to the landlord, and thus, is not reported to the IRS in the first place.
The deposit is supposed to be held in a separate account, and then is refunded when the tenant moves out.
If that’s not happening, then that’s another story altogether.
One month’s rent as a deposit is not enough in NYC, where the process of eviction can take several months. I don’t take the side of bad landlords, but this law doesn’t seem fair to the good ones.
Gee, if the lowest of lowlife renters didn’t trash everything they touch, I’d wager those mean old capitalists would never have dreamed up security deposits in the first place!
You have to pay a security deposit when you rent a car. I’ve never been a property owner, never owned my own home, but I can understand why landlords require them...especially these days.
True. In a perfect world, there would be no need for security deposits.
I know someone, who has rental property, and he screens tenants, only renting to tenants who are involved with his church. I don’t know if he asks for security deposits, but just saying, he get a high quality of tenant because of how he screens.
Probably none since the vast majority of renters file short form........Furthermore, rental payments have never been an IRS tax deduction anyway.........
When I was living in a huge apartment on the river with 3 roommates, we tried moving without paying the last month’s rent and got sued for the amount due.
Chapter 2: We had to pay it, and then we hired a lawyer to get it back.
Chapter 3: We won. (Judge to landlord’s lawyer: “Why don’t you just give their money?”)
Chapter 4: We split it 2 ways instead of 4, leaving out the two people who refused to pay for the lawyer. Lawyer gave us a big break and only took $150.
Moral of the story: NYC has nice people too.
That's really a misnomer. Landlords almost never hold back security deposits.
The real reason for "security deposits" is to help reassure the landlord that the prospective tenants will pay the rent on time. Not even having two months of rent saved up is a sign that the tenant is not able to manage money well and will likely miss the rent too.
“The government should force property owners to provide room and board to the less fortunate...”
Careful what you say.
ah, that makes sense. Thanks.
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